Out-of-state wholesale B&O tax effective Sept. 1

Beginning Sept. 1, new “economic nexus standards” will apply to most out-of-state wholesaling businesses.

According to the state Department of Revenue, this means that out-of-state businesses making wholesale sales into Washington will be subject to wholesaling business and occupation (B&0) tax if they meet certain criteria.

They will be responsible for the tax if they met the following thresholds in the previous year:

▪  More than $267,000 of gross income in Washington.

▪  More than $53,000 of payroll in Washington.

▪  More than $53,000 of property in Washington.

▪  At least 25 percent of total property, payroll or income in Washington.

Also effective on Sept. 1, that state had adopted a “click-through” standard for both retail B&O tax and retail sales tax purposes. Under these provisions, out-of-state retailers are presumed to have “physical nexus” within Washington if they:

▪  Enter into agreements with Washington residents and pay a commission or other consideration for referrals — such as linking on a website.

▪  Gross more than $10,000 in sales into Washington during the previous year under this type of agreement.

The department requires that businesses with a nexus in Washington register, collect sales tax and pay B&O tax.

For further information, visit dor.wa.gov or email RetailClickThroughNexus@dor.wa.gov.

This story was originally published August 25, 2015 at 4:39 AM with the headline "Out-of-state wholesale B&O tax effective Sept. 1."